Staking

Web3 & VR Definitions

In the Ethereum context, ‘staking’ of tokens or currency carries the traditional meaning of ‘setting aside currency for a determined purpose’; however, ‘staking’ can happen in a variety of venues with different effects. For example, on decentralized exchanges (DEXes), there is no centralized authority or bank putting up the funds to allow transfers to happen between parties; rather, the parties amongst themselves have to establish liquidity pools in order to facilitate swaps. In this context, someone might ‘stake’ tokens into a liquidity pool, often for a promised rate of return in exchange for the use of their tokens, with the option to withdraw their tokens later. On the Beacon Chain and Ethereum 2.0, ‘staking’ means something a bit different: 32 ETH may be staked at a determined smart contract address in order to operate a validator on the Beacon Chain; in this way, you help ensure the good functioning and safety of the network, and are rewarded for your staking.

A-Z Glossary About Dentaverse

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